At the time Russian First Deputy Prime Minister Sergei Ivanov was in Uzbekistan along with , Lukoil OAO President Vagit Alekperov, at the inauguration of gas production from the four gas fields run as a joint venture controlled 90 % by LUKoil and 10 % by the Uzbek government.

Speaking at the ceremony at the inuguration of the vast Khauzak gas field, Ivanov said: 'Russian companies such as Lukoil respect the environmental criteria, unlike foreign companies operating in Russia. Why give companies from outside Russia the opportunity to make money?'

OAO LUKoil take over 8 Uzbek gas wells

It was announced on Friday that LUKoil will buy a group of companies including SoyuzNefteGaz Vostok Ltd., a signatory to the Production Sharing Agreement for the South-Western Guissar and Ustyurtsk Region fields in Uzbekistan.

The 36 year deal deal gives Lukoil access an estimated 100 billion cubic meters of C1category gas reserves and expects to be producing 3 Bn cm by 2012 according to Uzbekistan's State Committee for Reserves.

LUKoil, which will in invest some US$700 Mn, expects to reach yearly production of about 3 billion cubic meters of gas by 2012. Uzbekistan is becoming an increasingly important gas exporter. Exports of natural gas from the country increased 9 times in the period of 2002-2006 from 1.4 bcm to 12.65 bcm annually. The volumes are expected to grow further and reach 18 bcm by 2010.

"Uzbekistan is one of Lukoil's most important regions outside Russia and widening our business here fully meets our long-term strategic goals," said Vagit Alekperov of LUKoil which is of course, part-owned (16%) by U.S. giant ConocoPhillips (COP).

In the former Soviet territories Uzbekistan takes respectively the fourth and third places by proven reserves of oil (599 million barrels) and gas (1.85 trillion cm). (The EU consumes the o.5 trillion cm per annum).

LUKOIL Overseas, Uzbekneftegaz, Petronas Carigali Overseas (Malaysia), CNPC International (China) and KNOC Aral (Republic of Korea) have established a consortium to explore and develop hydrocarbon resources of the Aral Sea with approximate expected investments in geologic exploration alone of up to US$100 million.

A major problem for Uzbekistan is that they don't have gas hungry neighbours and are reliant in shipping gas and oil on exporting its natural gas via existing Soviet-era infrastructure to Russia through Turkmenistan or Kazakhstan). Approximately half of the natural gas Uzbekistan currently produces is exported, mainly to Russia.

This of course means that LUKoil are in the hands of Gazprom over pricing and therefore are anxious to develop markets outside Russia.

LUKoil with the Uzbek government is anxious to pursue exports through the proposed pipeline to China through Turkmenistan and Kazakhstan. They also want to share in joining the lines flowing through Turkmenistan to Iran and onward to Turkey. Its infrastructure is hardwired into those of Kazakhstan and Turkmenistan, so if either country gets another export option, Uzbekistan gains access as well, meaning it could shift away from Russia overnight.